SCHD ETF down 6% from peak as AI concerns rise
The Schwab U.S. Dividend Equity ETF (SCHD) has declined by approximately 6% from its all-time high of $35.31, a level reached on August 24. The pullback coincides with broader market concerns regarding the concentration of the S&P 500 index in technology stocks and the ongoing build-out of artificial intelligence infrastructure. Investors are weighing whether major AI companies may scale back data center investments, a scenario that could trigger a sell-off in the AI trade.
The Schwab U.S. Dividend Equity ETF (SCHD) has declined by approximately 6% from its all-time high of $35.31, a level reached on August 24. The pullback coincides with broader market concerns regarding the concentration of the S&P 500 index in technology stocks and the ongoing build-out of artificial intelligence infrastructure. Investors are weighing whether major AI companies may scale back data center investments, a scenario that could trigger a sell-off in the AI trade.
SCHD is positioned as a diversification tool for portfolios seeking exposure away from the AI theme. The fund is not heavily weighted toward technology, which may provide resilience against an AI-driven downturn in the S&P 500. As of the latest reporting, SCHD offers a 30-day SEC yield of 3.36%. This yield is more than three times the dividend yield of the S&P 500, which stands at 1.04%. The fund’s performance has been consistent since its inception in October 2011, with average annual returns of 13.11% by net asset value over the past 15 years.
In the trailing 12-month period, SCHD returned approximately 23.4% by net asset value, outperforming the S&P 500. The fund’s sector composition includes top holdings in non-technology areas, offering a distinct profile compared to the index. While no asset is recession-proof, historical data suggests SCHD can offer relative protection during bear markets. In 2022, during the last major bear market, SCHD significantly outperformed the S&P 500 despite recording a negative total return. Dividend stocks and value-oriented companies within the fund’s holdings may outperform the broader market if the AI trade disappoints tech investors.